Analysis and Comparison of Costs and Benefits Associated With Dividing Operations at Arnold Engineering Development Center

Information was requested on the costs and benefits associated with dividing operations at the Arnold Engineering Development Center (AEDC) in Tennessee among as many as three contracts. The impact of a change in contractors on the efficiency of operations at AEDC and on employees of the incumbent contractor was explored. AEDC has been operated by a single contractor since its inception in 1950. The current 3-year contract expires in September 1980 but includes two 1-year options to continue with the incumbent through September 1982.

The Air Force has decided not to exercise the options with the incumbent contractor and is considering dividing the operations into three discrete functional areas: propulsion testing, aerospace flight dynamics, and mission support. The Air Force has solicited proposals from interested contractors for each of the functional areas of the total operation and intends to make its decisions on information obtained in the proposals. The division of operations at AEDC into three funtional areas is associated with the objective of achieving more competition. The management plan was developed to outline organizational and personnel requirements to increase the Air Force technical management and operation to achieve an improved center capability. Basically, the plan describes providing AEDC with the capabilities of analyzing and evaluating test data results in addition to current capabilities of data gathering, reduction, and reporting. The management plan was not developed for the purpose of supporting a decision to divide the work at AEDC among as many as three contractors. However, the management plan and the decision to divide work make it possible to consider a three-contractor operation.